Will Home Depot Send the Dow to Another Record?

In the past, favorable news from the housing sector has generally sent the entire stock market higher, so positive news from home improvement retailer Home Depot would ordinarily bolster stocks. But recently investors have paid more attention to potential changes in macroeconomic policy, and with multiple members of the Federal Reserve's Open Market Committee slated to speak today, everyone will be looking for hints about whether the Fed will start tightening its quantitative easing sooner than currently expected. Given the huge impact that QE and other stimulative measures have had on the financial markets, investors are anxious about whether the Fed will be able to exit those programs without causing big disruptions. As a result, the Dow Jones Industrials are stuck near breakeven, down a negligible two points as of 10:55 a.m. EDT, while the broader market is also down fractionally.

Home Depot, though, has risen 2.1% and hit a new high following its strong earnings report. The company said same-store sales rose 4.8% during the quarter, and revenue and net income both beat expectations. Moreover, Home Depot boosted its outlook for the full 2013 fiscal year by $0.15 per share and lifted its same-store sales guidance for the coming year to 4%. Those results are all in line with the strength we've seen in the housing sector lately, and if that strength continues, it should create positive economic ripples that go well beyond the home improvement sector.

JPMorgan Chase also opened higher, rising 1.3% as its annual shareholders meeting got underway at 10 a.m. EDT. Early reports indicate that CEO and Chairman Jamie Dimon will be allowed to keep his dual roles atop the bank's leadership structure, which should remove one source of uncertainty that has been weighing on JPMorgan lately. Nevertheless, given its ongoing regulatory and legal challenges, JPMorgan Chase's troubles won't go away even if the final shareholder vote ends up in Dimon's favor, and it will be interesting to see how the bank moves forward once it puts the vote behind it.

Finally, outside the Dow, Yingli Green Energy has soared 27% after increasing its forecast for solar shipments during the first quarter. As optimistic as that sounds, though, the actual numbers involved paint a different picture, as Yingli now expects a sequential decline of 6% to 7%, rather than the low-double-digit percentage decline it had expected previously. Even with the huge gains solar stocks have enjoyed recently, Yingli and its peers still face an uphill battle to get their business models to produce actual profits.

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